I, too, welcome this innovation of a prior debate on the Government's draft legislative programme. It is worth while, so it is disappointing that so few Members are present, but I hope that when it becomes a permanent fixture that will begin to change. I welcome it not least because it is an opportunity for Members to raise our eyes to the bigger picture—to see the wider landscape. We find it so easy in this place to be borne down on by the relentless treadmill of nitty-gritty legislation. To look at the themes behind the Government's intentions for the next year, and perhaps beyond those, is very worth while.

I congratulate my right hon. and learned Friend the Minister for Women and Equality on her statement about the equality Bill, which is excellent and much-needed legislation. There are several items in the draft legislative programme that I strongly welcome, but I want to measure it against the problems that we in this country actually face, which seems to me the relevant index.

Three major breakdowns in the British state are seriously threatening both our economy and society. One could probably say that of any year that one is discussing, and I want to discuss the issues in this particular year. One is the over-centralisation of power and the virtual collapse of accountability in this country, to which my hon. Friend Mr. Purchase eloquently referred; he was absolutely right. The second is the breakdown in financial markets and the manifest and comprehensive failure in banking regulation. The third—there is no originality in any of this, of course—is the collapse of the housing market, which will deprive perhaps up to one fifth of the population of any reasonable opportunity of getting a decent home for the foreseeable future. I am pleased to see and welcome the fact that there are items in the draft legislative programme that touch on all these points, but none of them adequately addresses the depth of the problems.

I turn to the first of my three issues. Sir Robert Smith spoke about constitutional renewal at some length and ended his speech on it, and he was absolutely right. He did so in the context of preparing for opposition; I do not accept that point, but irrespective of a party's being in opposition or in government, it is for the whole House—all of us have an interest in this—to strengthen the procedures of Parliament. Parliament is weaker today vis-à-vis the Executive than at any time in my political memory, and I have been here quite a considerable time.

It is proposed in the draft legislative programme that Parliament be given the final say in ratifying treaties, which is obviously right, and—I am very pleased to see this—that the civil service should for the first time be put on a statutory basis. There has been a great deal of discussion in the past about Governments and Ministers overstepping the line of propriety between politics and the civil service. To clarify the position is very helpful. However, on the wider constitutional issue, that is hardly even skirting the problem. There is a huge democratic deficit in this place and outside. Within Parliament itself, a whole series of reforms is urgently needed to redress that imbalance of power between the Executive and the legislature. Let us not forget—I am sure that none of us does—that this programme was the centrepiece of the Prime Minister's first major statement to Parliament after he became Prime Minister in July of last year. I think that we all thoroughly welcomed it, and I still welcome it, but the heady atmosphere of ambitious reform that it generated has yet to be realised.

I want to make some proposals that I hope will command support across the House. Members of Select Committees should be elected by secret ballot of all non-Executive Members of the House in accordance with party quotas and should choose their own Chair. That would give Select Committees an independence and standing that would greatly improve the scrutiny of the Executive by the House. In addition, the Prime Minister's nominations for the Cabinet should, as in the US Congress, be subject to ratification by the appropriate Select Committee.

The terms of reference and membership of committees of inquiry, an extremely important part of the power of a Prime Minister and of enormous relevance to Members of the House and the wider public, should be ratified by Parliament. I am sure that in the vast majority of cases they would be, but there should be that ratificatory process. In addition, Parliament—this would be an innovation, and an important one—should be empowered and funded to set up its own parliamentary commissions of inquiry where it believed it necessary. That is not a radical proposal. I remind hon. Members that that is exactly what the Victorians did, and it is only to return to some of the excellent scrutinising work that Parliament did more than 100 years ago.

The Liaison Committee should have the right—again, not an original idea of mine; it happens in the French Assembly's equivalent of the Liaison Committee—once a month, or at some other agreed interval, to table a motion for debate and a vote on the Floor of the House. That would make a great deal of difference, whether we are talking about Select Committees or the Liaison Committee. Such a debate should not be on the Adjournment of the House, a mere discussion shop or an Oxford union-style debate, but for a vote of the House, decided not by the Government but by the House, and once a month is not an unreasonable proposal.

I could go on, and I hope that others will do so, but perhaps we should also have a Select Committee on the democratisation of the House. Others may say that we have the Procedure Committee, which I am perfectly well aware of, but what I mean by a democratisation Committee is that its terms of reference, membership and Chair would be elected by the House, not by the Executive or the Whips. It is our House and we should treat it as such, and we should take upon ourselves the rights and responsibilities that that entails.

Reform is also just as necessary in the wider society outside the House. We are regaled with the evidence for that virtually every day in the newspapers. In the last few months alone, I have kept a record of several events that are linked by one common thread. Discs containing the sensitive personal details of 25 million people were lost by a private contractor in transit. Metronet's tube refurbishment programme went bust, leaving the taxpayer with a £2 billion bill. A disc containing DNA profiles of more than 2,000 people linked to serious crimes abroad went unchecked for a year by the Crown Prosecution Service. The rescue of Northern Rock, as everyone knows, has cost the taxpayer some £25 billion—I have lost sight of the exact figure—but the former chief executive has walked away with a bonus of £750,000. The National Audit Office recently found that the Ministry of Defence had spent at least £400 million on eight Chinook helicopters that were still not airworthy 13 years after being ordered. I could go on, because there are many more examples.

What is the link between those examples? It is that nobody was ultimately held responsible. That is what I mean by the collapse of accountability, and it is very unhealthy. I am not being punitive: I am simply saying that we have to consider the negligence, the mismanagement and the other causes. People have to understand that rights and power carry with them responsibilities.

Why has that collapse in accountability occurred? There are several reasons. Civil service liability is shielded by the myth that the Minister is always responsible. The Minister should be responsible for all things political, but the ambit of responsibility often goes considerably wider and we need to recognise that. Another reason is regulatory capture by the vested interests. One worrying example, which I noted yesterday, was the announcement that an ex-private equity chief has been selected to head up Her Majesty's Revenue and Customs. That is an instance of regulatory capture that I find disturbing.

Another problem is that the regulators, especially in the Treasury, are given too little staffing and funding to be really effective in pursuit of the endemic culture of tax evasion and avoidance. In the unfettered neo-liberal economy in which we live, the big companies and the big financial institutions have largely captured the state—as we repeatedly see. Whatever they demand, they usually get, as is laid out in the newspapers for us week after week. That is where constitutional reform is needed, because the big companies have too much power relative to the democratic forces in this place that are supposed to hold the ring in managing the state.

The Government like to talk about empowerment, and I am pleased about that. They talk about empowering the citizen, whether through citizens' juries or participatory budget making, but the key is that the Government have to mean it. It does not happen all that often, but when consultations of public opinion take place—notoriously on nuclear energy, genetically modified foods or the third runway at Heathrow—it only generates cynicism when most people give one view and the Government still go ahead with their predetermined view.

My hon. Friend the Minister may share some of these views, although perhaps I should not say that. It is very difficult to make the case for constitutional renewal when only 24 hours ago the Planning Bill removed all democratic accountability from the licensing of nuclear reactors, incinerators, airports, large road-building schemes and waste dumps. In my view, it is just as difficult to make the case for constitutional renewal when, under the draft legislative programme, the Attorney-General, although he or she will be less able to direct prosecutors, will still be able to prevent prosecutions, as was the case in the recent BAE corruption investigation. I cannot see how that cannot be a conflict of interest. I hope that when we come to debate the matter the House will examine it very carefully.

The second area of major breakdown concerns the neo-liberal economic order that, as I said, has been dominant in this country and throughout the west—in the US and Europe—for the past three decades, together with the light-touch regulation, which is fairly unique to London, that has always accompanied it. The proposed Bill on banking reform, which I welcome, will make it easier in future for the Treasury, the Bank of England and the Financial Services Authority to intervene when a bank gets into difficulty. That is fine. It will also strengthen the financial services compensation scheme. No one would disagree with that. It is perfectly sensible, good stuff, but it does not begin to address the fundamental underlying causes of the banking crisis.

Several reforms are clearly urgently needed and I want to mention some of them. Structured investment vehicles—SIVs, as they are known in the trade—collateralised debt obligations and all the other fancy, new-fangled financial derivatives through which the sub-prime securitised contagion was carried across the world should surely now all have to be approved, if they are to be approved at all, by a much revamped and more robust FSA. Otherwise, when the economy eventually recovers—it will, even if it is several years down the line—will we not return to where we are now? Where is the evidence of a fundamental rethinking?

Credit rating agencies, staggeringly, are now paid by the institutions they assess for creditworthiness. That is almost like something out of "Alice's Adventures in Wonderland". It is extraordinary that that has gone on for so long. Those agencies should clearly be regulated to ensure that they are wholly independent with no conflict of interest. That is obvious, but where is the evidence that that will happen?

Investment banks should be legally separated from commercial banks. That was exactly what happened in the US in an earlier era and we have to look again at that precedent. The financial system, which has been recklessly overextended in recent years almost like a giant pyramid selling scheme to fund the enormous City bonuses, clearly needs urgent regulation. I am not objecting to high pay or a pretty good bonus as long as they genuinely reflect public welfare and are not a creaming-off of wholly artificial financial froth, which is what so many of the current payments are.

Robust capital adequacy ratios are also clearly urgently needed if western banks are not going to need increasingly to be bailed out. Only yesterday, we saw Barclays being bailed out by a Qatari bank and sovereign funds from China, Asia and the middle east.

We need to spend a lot more time in the next year on banks. They should also understand that they have responsibilities besides their drive for self-enrichment. They should be required to co-operate in establishing a public mortgage bank—I am rather sorry that Northern Rock did not stay in the public domain to do exactly what I am proposing—focused on credit provision for households with low incomes or irregular work. The banks should also have an obligation—I do not say this to be radical or to speak out of turn—similar to the one in the United States, where banks have to contribute at least 2 per cent. to 3 per cent. of their lending to community projects or social enterprise. If they do that in the States, the apogee of capitalism, why in goodness' name do we not do it in this country?

We need much more public debate on the subject. It is astonishing that since August, when the crisis began, there has been virtually no systematic discussion of it in this House. We need that debate, and preferably a high-powered committee of inquiry to investigate the whole range of problems. There is not just one problem; they are all interconnected—the lack of prudential controls, the regulatory capture, the obscure accounting, the absence of auditor independence, and the existence of an economic élite driven by reckless short-term profit-making at the expense of taxpayers, who then have to bail them out.

The third area of serious breakdown is the housing market. I welcome the proposed housing Bill, which will do some useful things. It will give social housing tenants more influence over the management of their homes, which is fine, and give people in general more influence over decisions made by their local councils. I am sure that we would all applaud that. However, it does not begin to address the depth of the crisis that is now enveloping housing in this country.

There has never been a time when the divide between rich and poor has been as great as it is today. I say that with great sadness. I am in favour of people getting better off, and I am not opposed to people being rich, but I am opposed to the enormous gulf between the people at the bottom and those at the top.